QuickBooks® Year End Tips
Conventionally, the end of a financial year is characterized by intensified accounting activity for providers and users of accounting services. This intensification occurs because organizations and individuals engage in closing their accounting records for the ended financial year and in recording transactions for the succeeding financial year; both procedures often are simultaneous, until the ended year’s accounting is finalized. Additionally, the year-end busyness overlaps the exuberance of Christmas and New Year celebrations – particularly if the financial and calendar years coincide. To help accounting personnel manage their always challenging year-end activities, QuickBooks® has several solutions; they include the interactive QuickBooks® Year-End Guide.
One may access the QuickBooks® Year-End Guide by opening QuickBooks® Online, going to the Help menu and selecting “Year-End Guide”. The guide itemizes fundamental procedures for the year-end closing of accounting records; each item has hyperlinks to detailed instructions. Items are under three headings: “Tasks to prepare for filing taxes”, “Tasks to do if you use subcontractors” and “Tasks to do if you have employees”.
The items’ names indicate QuickBooks® year end tips pertaining, inter alia, to reconciling balance sheet accounts, analyzing income statement accounts, backing up accounting data for the year just ended and generating year-end reports. These formalities are among the standard procedures for the year-end closing of accounting records. Upon completing each of these formalities, the user of the QuickBooks® Year-End Guide can tick the respective item and regularly save the guide. The saved guide functions as a status report on the year-end closing of the accounting records. Effectively, the guide is a checklist for preparing year-end accounting reports that can withstand scrutiny.
For QuickBooks® reports to be finalized, many year-end adjustments are usually part of the formalities. Clients’ accounting personnel and external auditors make separate adjustments which they can share via QuickBooks®’ “Accountant’s Copy” files. Alternatively, clients may monitor external auditors’ adjustments by creating separate user accounts for the auditors. If all year-end tasks are completed, the accounting records for the ended year are closed.
In QuickBooks®, one does not need to close the accounting records at year end: QuickBooks® automatically does this on the last day of the financial year. QuickBooks® routinely transfers the closed year’s net income to retained earnings and initializes income statement accounts so that the balances become zero at the start of the new financial year. QuickBooks®’ “Closing the Books” option, accessed via “Company” and then “Preferences”, facilitates entering the closing date for the financial year.
Final year-end accounting reports can be produced as hard and soft copies for circulation and filing. These reports help individuals and organizations to assess their performance and comply with tax obligations. The balance sheet and income statement, generated by using QuickBooks®’ “Reports” menu, are the most important year-end accounting reports.